Tories want council tenants to get cash to buy private homes

The Conservatives will today unveil proposals to roll out the "home-owning democracy" first promised by Margaret Thatcher, as their public services policy review group argues that council tenants should be given cash to buy houses in the private sector.

The measure would in effect extend the right to buy, introduced under the Tory government in the 1980s, allowing more people to step on to the property ladder.

Members of the review group believe it would encourage social mobility and transform council estates which have become "dead-end 'ghettos' ... replacing them with more cohesive neighbourhoods that have a sense of local pride and ownership".

They argue that social housing should be a transitory stage in people's lives and warn that at present tenants are trapped on estates which in some cases "have become epicentres of poverty and crime, fuelling poor public health, truancy and educational failure as well as mental illness".

They add: "Housing ought to be central to all improvements in wellbeing for the individual and for society."

Under their proposal, council tenants would be able to claim 10% of the value of their home and use the money to move into the private sector.

The report, to be launched in London this morning by the former health secretary Stephen Dorrell and his co-chairman, Lady Perry, warns of a growing gap between the desire for home ownership and soaring property prices.

Giving council tenants the right to buy their homes was one of the Thatcher government's most popular policies. But it led to shortages of local authority housing.

The Tory leadership has yet to decide which parts of the reviews will become official policy.